[Federal Register Volume 65, Number 214 (Friday, November 3, 2000)]
[Notices]
[Pages 66274-66275]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28222]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43485; File No. SR-ISE-00-08]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the International Securities 
Exchange LLC, Relating to Fee Changes

October 26, 2000.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 12, 2000, the International Securities Exchange LLC 
(the ``Exchange'' or the ``ISE'') filed with the Securities and 
Exchange Commission (``Commission'') the proposed rule change as 
described in Items I, II, and III below, which items have been prepared 
by the ISE. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 73s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The ISE is proposing various changes to its fee schedule: (i) To 
provide discounts for multiple ``Click'' terminals; (ii) to establish a 
fee for ``trade review terminals''; (iii) to clarify the application of 
execution fee discounts; (iv) to reflect that the ISE collects its 
``membership'' or access fee on a monthly, rather than quarterly, 
basis; and (v) to permit the ISE to collect its regulatory fee on an 
annual, rather than quarterly, basis. The text of the proposed rule 
change is available at the ISE and at the Commission.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the ISE included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any

[[Page 66275]]

comments it received on the proposed rule change. The text of these 
statements may be examined at the places specified in Item IV below. 
The ISE has prepared summaries, set forth in sections A, B, and C 
below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    The purpose of the proposed rule change is to effect the following 
changes in the ISE's fees:
    Discounts: A Click terminal is a device that ISE Electronic Access 
Members (``EAMs'') can use to enter orders on the ISE. The current ISE 
fee schedule imposes a flat monthly fee of $500 per terminal and $250 
for each application program interface (``API'') associated with a 
terminal. This structure can act as a disincentive for EAMs to utilize 
multiple Click terminals. The ISE is adopting a tiered fee schedule 
with volume discounts for Clicks and APIs that would lower the software 
fees to half the current charges (from $500 to $250) for the sixth 
Click terminal and all subsequent terminals, and the API fee (from $250 
to $100) for the sixth and subsequent APIs.
    Trade review devices: These devices allow a member to ``listen'' to 
the broadcast of ISE messages confirming executions effected by the 
member. Members use these devices for analytical, hedging, risk 
management, back-office processing and similar purposes. The ISE is 
establishing monthly ``trade review device'' fees, including multiple-
terminal discounts, that are the same as the Click fees: $500 for the 
first five terminals and $250 per terminal thereafter.
    Execution Fees: The ISE fee schedule provides for lower execution 
fees as the Exchange's average daily volume (ADV) increases. There are 
discounts at ADV of 300,000, 500,000 and 700,000 contracts a day. The 
amendment to the fee schedule clarifies that the reduced fees apply 
only to executions above the break-points. For example, at ADV of 
550,000 contracts; the $.21 fee will apply for the first 300,000 
contracts; the $.17 fee will apply for the next 200,000 contracts; and 
the $.14 fee will apply for the last 50,000 contracts.
    Membership Dues: ISE Rule 205 authorizes the Exchange to charge 
``membership dues,'' payable on the first day of a calendar quarter. 
The fee schedule, however, includes monthly ``access fees,'' rather 
than specific membership dues. The ISE is amending ISE Rule 205 to 
reflect this, and is not proposing any changes to the access fees 
themselves.
    Regulatory Fees: The ISE fee schedule contains a provision for an 
annual $3,500 regulatory fee. ISE Rule 208 currently states that this 
fee is to be collected on a quarterly basis. The ISE believes that it 
is an unnecessary administrative burden to bill for and collect this 
relatively small fee on a quarterly basis. Accordingly, the ISE is 
eliminating the word ``quarterly'' from this rule so that it can 
collect the fee on an annual basis. There are no changes to the fee 
itself.
    The basis for this proposed rule change is the requirement under 
section 6(b)(4) of the Act \3\ that an exchange provide for the 
equitable allocation of reasonable dues, fees and other charges among 
its members and other persons using its facilities.
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    \3\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The ISE believes that the proposed rule change does not impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing 
for Commission Action

    Because the ISE has designated the foregoing proposed rule change 
as a fee change pursuant to section 19(b)(3)(A) of the Act \4\ and Rule 
19b-4(f)(2) thereunder,\5\ the proposal has taken effect upon filing 
with the Commission. At any time within 60 days of the filing of such 
proposed rule change, the Commission may summarily abrogate such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.
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    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
is consistent with the Act. Persons making written submissions should 
file six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of 
the submission, all subsequent amendments, all written statements with 
respect to the proposed rule change that are filed with the Commission, 
and all written communications relating to the proposed rule change 
between the Commission and any person, other than those that may be 
withheld from the public in accordance with the provisions of 5 U.S.C. 
552, will be available for inspection and copying in the Commission's 
Public Reference Room. Copies of such filing will also be available for 
inspection and copying at the principal offices of the ISE. All 
submissions should refer to SR-ISE-00-08 and should be submitted by 
November 24, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-28222 Filed 11-2-00; 8:45 am]
BILLING CODE 8010-01-M